CES- RADIO DASHBOARD FRAGMENTATION (PART II)

As discussed in my prior post the technical side of car integration for Internet radio is difficult due to the many car companies, their suppliers and in dash systems.  Pandora, Tunein, NPR and iHeart radio have an amazing lead on the terrestrial radio industry for real estate on the car entertainment systems.  Pandora was integrated with every car company we visited at CES and claims to be integrated with 1,000 different devices.  These integrated applications appear prominently as listening options.  The rest of terrestrial radio streaming is for the  most part not represented except as embedded in Tunein, Aha or iHeart.  This is a major factor as to why many other radio stations have agreed to be included in the Tunein and iHeart platforms as it give them access to these distribution systems which also have in car access.  However, in a point I made in an earlier post they are lost in a multitude of options.

Yes there is still a radio button in the car and this will not disappear any time soon.  However, it is now just one of a multitude of choices.  As we know people typically have about 6 presets (their favorites) and scroll among them.  How will terrestrial radio compete in a fragmented dashboard.  In my view it will not be based on music but other unique and local content.  Unfortunately radio has reduced its investment over the last several years in its product.  Very little programming is local and unique.  Competition for other information such as news and weather is readily available from other sources.  Those that do invest and have a multi-pronged distribution approach will be the winners.

ALL EYES ON SIRIUSXM MUSIC ROYALTY NEGOTIATION

Given the recent filing by Reps. Jason Chaffetz (R-UT) and Jared Polis (D-CO) of the “Internet Radio Fairness Act,” bill and the significant impact that this could have on the economics for Internet radio we should all be following the upcoming music royalty negotiation that SiriusXM will undertake.  The House Bill proposes the same standard as that governing SiriusXM’s music royalty rates.  Should the rate currently paid by Sirius, 8%, be also what governs terrestrial broadcasters that are streaming this would significantly improve the economics of the Internet radio industry.  Please see an excellent overview in David Oxenford’s blog.